Tallgrass Midstream Weighing Offer to go Private
HOUSTON (P&GJ) — Tallgrass Energy said it is forming a committee of independent directors to consider a Blackstone Infrastructure Partners proposal to buy all of the outstanding shares it does not already own and take the Kansas-based midstream company private.
The $19.50-per-share offer from Blackstone represents a 36% premium over the closing price of Tallgrass shares Tuesday and a 12% premium over the weighted average price over the preceding month. Its shares traded up to $19.65 Wednesday before closing at $19.46, up 35.61% from the prior-day's closing price of 14.35.
According to the "take-private" offer letter, the proposed deal would be structured as a merger between Tallgrass and an acquisition vehicle created by Blackstone, with Tallgrass surviving the merger.
Investment giant Blackstone already holds 44.2% of all outstanding of Tallgrass, which operates the Pony Express and Rockies Express pipelines and has announced plans for the 800,000-bpd Seahorse pipeline from Cushing, Okla. to the Gulf Coast.
Tallgrass' share prices has fallen since Blackstone acquired its large stake early this year, reflecting both an overall slump in energy stocks and second-quarter revenues and earnings that fell short of analyst projections.
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